Risk Update

Thanksgiving Wishes (Less Risk)

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Wanted to take a moment to wish every reader a Happy Thanksgiving. (And that goes for you international folks too, please find an excuse to eat some pie and hug a loved one this week as well.)

Very thankful for the engaged reader community that’s grown with this blog over the past 18+ months since launch.

I’m grateful in particular to the many who have sent in notes of support, referred friends and colleagues to sign up for updates, emailed articles and links of interest, and generally been nice people on the Internet. (I think more of that, and all of the above is generally a good thing to encourage.)

With hopes of a bit of relaxation and refreshment for all within eyeshot of these pixels, and optimistic wishes for a smoother 2021 and beyond, signing off for a few days.

(Unless there’s a crazy conflict making news. Then I’ll post. >smile<)


Risk Update

Conflicts Contributing to Change — Lawyer Departures, Lateral Movement & New Firms

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King & Spalding M&A Leader Woolery Launches Boutique” —

  • “Jim Woolery, the former Cravath, Swaine & Moore dealmaker who recently led the M&A practice at King & Spalding, launched this week a new boutique focused on representing families and family offices in blockbuster transactions.”
  • “‘Increasingly, as law firms become like the large accounting firms, there’s going to be a role for the independent boutique model in the way there wasn’t before,’ Woolery said Thursday.”
  • “Woolery said he brings with him roughly 20 ‘blue chip’ clients, including 10 that he described as ‘very significant.'”
  • “The firm’s independence will allow it to work quicker, Woolery boasts, sparing it from extensive conflict checks that touch not on just other deal work but also the efforts of litigators and those handling investigations into special matters. These checks cannot only slow down the work flow but also compromise the confidentiality of deals within a law firm. Woolery was quick to emphasize that he had no particular issues with King & Spalding and painted these challenges as inherent in all large firms.”

Former Federal Prosecutor and AmLaw 100 Partner, David M. Chaiken, Launches National White Collar Trial Boutique” —

  • “Top white collar trial partner and former federal prosecutor David M. Chaiken announced today the formation of ChaikenLaw Ltd., a boutique national white collar litigation and investigations law firm based in Atlanta.”
  • “said Chaiken: ‘Our goal is to provide the highest quality legal representation to our clients—equal to that of any top firm in the country—but with some of the efficiencies that can be achieved in a smaller setting, such as lower overhead, fewer conflicts, and more flexible fee arrangements.'”
Risk Update

Counsel Changes — Past Client Work Not Disqualifying, Firm Bans Bannon

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Ex-Faegre Attorney’s Past Work for Biomet Not Disqualifying” —

  • “Thompson is an associate at Bachus & Schanker LLC, the Bayeses lead counsel. She began her legal career several years earlier at Faegre Drinker Biddle & Reath, where she did routine, entry-level work on products liability cases involving Zimmer Holdings Inc.’s Durom Cup metal-on-metal hip implant.”
  • “Zimmer and Biomet were rivals at the time, but merged shortly before Thompson left the firm. Thompson entered an appearance on behalf of the merged firm in one case in Utah state court. That case involved a different hip implant and didn’t raise defective design claims, the court said.”
  • “The court undertook an extensive look at six factors relevant to determining if Thompson’s representation of the Bayeses was substantially related to her representation of Biomet in the Utah case. It concluded this wasn’t ‘a close call.'”
  • “Only one factor arguably weighed in Biomet’s favor—the knowledge of Zimmer’s negotiating strategy Thompson gained during the Utah case, the court said Thursday. The court said it doubted Thompson’s knowledge of or contribution to those strategies was significant and, in any event, an adverse finding on a single factor wasn’t enough to disqualify her.”

Quinn Emanuel no longer represents Steve Bannon after he suggests beheading Dr. Fauci” —

  • “Quinn Emanuel Urquhart & Sullivan has said it is no longer representing Steve Bannon after the former strategist for President Donald Trump made controversial remarks on a podcast.”
  • “Quinn Emanuel partner William Burck did not disclose the reason for withdrawing from Bannon’s defense on charges that he defrauded donors to an online crowdfunding campaign to help pay for the border wall.”
  • “Burck’s Nov. 6 letter to U.S. District Judge Analisa Torres of the Southern District of New York merely said Bannon is in the process of retaining new counsel, and Quinn Emanuel intends to move to withdraw.”
  • “The New York Times spoke with Stephen Gillers, a professor at the New York University School of Law, about the withdrawal. Speaking generally, Gillers said lawyers will withdraw when a client sabotages their work. ‘Bannon’s public comments made Burck’s job more difficult,’ Gillers said. ‘Burck was hired to fight the prosecutors and should not also have to do battle with his own client.'”
  • “The New York Law Journal also points out that prosecutors had raised concerns about a potential conflict of interest because Quinn Emanuel lawyers were involved in work for the crowdfunding campaign, called We Build the Wall. Burck had responded that none of the lawyers working on Bannon’s criminal case had been involved in that work.”
Risk Update

Email Risk & Data Security (Today and Tomorrow) — New Lawyer Commentary on Email Encryption

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It’s Friday, so I’ll start with a personal anecdote and a bit of thought on the subject of lawyer email. (Don’t worry, we’ll have plenty on meat and potatoes conflicts news next week, I’m sure.)

Last year, out of the blue, a lawyer emailed me, at my personal address, draft trust documents meant for a client. I wrote back noting the error, and deleted the documents — which contained obviously sensitive client financial and family information. The lawyer didn’t respond…

A few weeks later, I received another round of documents, now ready for execution. I called the local Bar in his state to understand what I should do here about this lawyer. I ended up writing back to him, suggesting he acknowledge the error and promise to fix it, before creating further risk for his client and himself. (I might have mentioned that I asked the Bar what to do… That got his attention and quick response. Teachable moment accomplished.)

Questions of email diligence and issues like encryption often touch on inadvertent disclosure to someone like me (or in the case below opposing counsel). And the article linked below covers the basics, ABA rules, and latest thinking.

But one element I have yet seen really considered is the extent to which our email providers may be indexing data, storing information and building profiles — and how that might or should factor into this equation.

In my situation above, did Google scan the trust document in question? And does it now know that user X with social security and identifying information Y has net worth Z? Or even that a particular lawyer or firm is representing a particular client on a matter? (We all know it’s scanning and analyzing files, it tells you as much when you click that attachment download button.)

If a lawyer sends documents via Gmail or the like, do or will recipients start seeing more “relevant” ads based on the content — perhaps in this case more exacting detail on their net worth, assets and personal relationships? Or based on other factors we mortals don’t understand but the algorithms do?

In sending unencrypted email and attachments, did the lawyer just disclose/reveal confidential information to Google? I guess the rules don’t think so, at least not today. Will they one day? Or am I still reading too much sci-fi?

(Interestingly, it’s my layperson’s understanding that you can’t do this sort of thing with health information. Per HIPAA and related rules, if a medical provider sends an email that says: “Your test results show X” over Gmail, that’s a no-no. Providers set up encrypted portals with logins and whatnot for communication beyond generic scheduling and such. I’m sure no reader will be shocked to hear I have a similar story to share about an exchange with one provider’s lawyer in this regard. Perhaps for another day…)

Okay, back to the article. Here, Lawyer Irwin Kramer summarizes the rules and developments: “Encryption Ethics” —

  • “After emailing several documents to opposing counsel, she slammed me for failing to encrypt the message and exposing records on her client’s medical history. Must I encrypt these emails?”
  • “There are no rules which expressly require an attorney to encrypt email messages. But you must still make reasonable efforts to protect the privacy of sensitive data and communications.”
  • “Where attorney-client communications are concerned, the Rules of Professional Conduct provide that an ‘attorney shall not reveal information relating to representation of a client.’ In response to the increasing threat of data breaches among law firms, many states have begun to implement a rule requiring lawyer to ‘make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.’ Modifying its Model Rules to account for technological change, the American Bar Association has commented that ‘competent’ lawyers ‘should keep abreast of … the benefits and risks associated with relevant technology.'”
  • “But what about information pertaining to adversaries and other third parties? To date, most of the literature focuses on attorney-client communications. But the rules recognize an attorney’s duty to respect the rights of third persons. Just as Rule 4.4(b) requires a lawyer to notify the sender of ‘electronically stored information … relating to the representation of the attorney’s client’ that may have been ‘inadvertently sent,’ the same degree of professionalism should apply to sensitive information on these individuals.”
Risk Update

Risk News — IP Ethical Screen Challenged, A New Election Conflict Alleged

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Maxell Scoffs At DLA Piper’s ‘Ethical Screen’ In Apple IP Suit” —

  • “Maxell, represented by Mayer Brown LLP, and Apple, represented by DLA Piper, have been locked in the disqualification dispute in the run-up to a Dec. 7 patent trial, arguing over whether DLA Piper can still participate after it was found that former Mayer Brown lawyer Justin Park, who went to DLA Piper in January, allegedly brought privileged Maxell documents with him.”
  • “‘DLA Piper’s opposition is devoid of any adequate response to Maxell’s allegations that DLA Piper failed to implement a timely, effective ethical screen for Mr. Park … DLA Piper had and has in its possession Maxell highly confidential and attorney-client privileged documents which it previously denied having,’ Maxell said.”
  • “According to Maxell, it found out DLA Piper had been hired by Apple regarding an International Trade Commission matter at the end of July. DLA Piper says it began a screening process on July 30 with regard to Park and Maxell, and completed it “well before August 28,” the date the firm says Apple hired it for this Maxell case. But Maxell says this screen was “insufficient” and didn’t prevent the sharing of documents.”
  • “Maxell said that from 2016 to January 2020, Park worked on all of Mayer Brown’s smartphone matters for Maxell and was an ‘integral part’ of the company’s litigation team, billing hundreds of hours.”

Atlanta Law Firms Deny Conflict In Georgia Election Suits” —

  • “Atlanta-based law firms Taylor English Duma LLP and Robbins Ross Alloy Belinfante Littlefield LLC on Thursday denied an alleged conflict of interest over their involvement in representing Georgia election officials in one voting suit and the Donald Trump campaign and Georgia Republicans in another.”
  • “The law firms have drawn fire for what critics say is an untenable position: both defending the Georgia election process while also representing Republicans who’ve alleged problems in the state’s count of 2020 presidential ballots.”
  • “‘Taylor English attorneys have not brought any litigation asserting voter fraud, nor are we representing any entity in a challenge to or contest of Georgia election results,’ the firm said in an emailed statement. ‘We have taken no action on behalf of any client adverse to the legal interests of the Georgia secretary of state, and vice-versa. We have no conflict of interest.'”
  • “Taylor English and Robbins Ross lawyers both are defending Georgia Secretary of State Brad Raffensperger and state election board members in a three-year federal court case challenging the state’s election process. The same lawyers also represented Trump’s campaign and the Republican Party of Georgia in a post-Election Day suit alleging 53 ballots were wrongly counted in the Savannah area, which was promptly dismissed by a Chatham County Superior Court judge.”
  • “Cunningham [Georgia State University College of Law legal ethicals professor], who is not involved in the election litigation, said he was astounded that lawyers who had for years represented the state in defending its election process would simultaneously challenge that process on behalf of Trump’s campaign and the Georgia Republican Party. ‘How can that be anything than entirely inappropriate? I think it’s appalling,’ Cunningham said. ‘Even if the representation of the secretary of state and the Trump campaign were completely unrelated, I think it would still be a problem, but they’re closely related. And right now the secretary of state needs to have unimpeachable integrity in dealing with this election.'”
  • “Cunningham said at minimum the Taylor English and Robbins Ross attorneys should have asked for Raffensperger’s permission to represent Trump and Georgia Republicans, but that regardless the conflict was too serious to be waived by consent.”

A local paper, the Atlanta Journal-Constitution also covers the story: “Does representation of both Trump and state create a conflict of interest?

Risk Update

Law Firm Reputation Risk Management — Best Practices from a Lawyer/Crisis Communications Expert

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Interesting commentary and advice on law firm PR risk from a lawyer/crisis communications specialist: “Lessons in Law Firm Reputation Management: How Firm Leaders Should Prepare for Public Scrutiny When Representing Political Clients” —

  • “For BigLaw, especially those that represent political administrations, now is the time to prepare for public attacks regarding who your firms represent and what your lawyers stand for.”
  • “There have been situations where law firms have chosen not to represent clients in controversial matters due to the enormous backlash. In 2011, King & Spalding chose not to represent the U.S. House of Representatives as it sought to uphold the Defense of Marriage Act (DOMA) outlawing same-sex marriages. The firm determined that, due to its support for gay rights, it would not take on the case.”
  • “Many BigLaw and midsized law firms handle government matters and high-profile government individuals. Keeping this in mind, as well as each firm’s fiduciary duty to protect all employees’ and clients’ best interests, every firm should consider protocols to avoid getting on a boycott list.”
  • “To prepare for potential public scrutiny and reputation management, consider the following questions:
  1. “Is our firm a potential target for negative public scrutiny?
  2. Should anyone from the firm be a public voice in media while controversial lawsuits are ongoing?
  3. What is the internal impact if the firm is mentioned about its representation of XYZ client?
  4. What protocols, if any, should we put in place to review prospective clients – for example, political figures – for conflicts and cultural fit?
    • While law firms should not overly regulate their attorneys, it is in the best interest of every law firm and its clients to implement best practices and protocols for bringing on high-profile political clients. The protocols should include:
      • Conflict check
      • Financial competence check
      • Merit review of claims (Rule 11 of Federal Rules of Civil Procedure)
      • Cultural fit with firm
      • Consequences for client base
  5. Should we revisit our firm’s media policy?
  6. What should we be monitoring during a public outcry (and how)?
  7. If clients question attorneys’ representation of other clients, how should the attorneys respond?
  8. Should attorneys be permitted to espouse their individual political beliefs on social media, especially during divisive times?”

For those interested in the nitty gritty details and recommendations for each numbered matter, and additional commentary on recent news, see the complete article.

Risk Update

OCG & Engagement Letters — Proposed DC Bar Changes Invite Commentary

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My thanks to the folks at the DC Bar for sending word: “Committee Invites Comment on Proposed Rules Changes Relating to Client-Generated Engagement Letters and Outside Counsel Guidelines” —

  • “The District of Columbia Bar’s Rules of Professional Conduct Review Committee is seeking comments from D.C. Bar members, other lawyers, law firms, corporate legal departments, and non-lawyers about a group of proposed amendments to the D.C. Rules of Professional Conduct that would address issues arising from client-generated engagement letters and outside counsel guidelines. Comments are due by close of business on February 11, 2021.”
  • “Specifically, the proposed amendments would:
    • Amend Rules 1.7 and 5.6 to remove the existing open-ended permission for a lawyer and client to expand the scope of what constitutes a conflict of interest under the D.C. Rules, except where broader coverage is required by other law
    • Amend Rule 1.8 to prohibit a lawyer from proposing or accepting conditions that impose liability on a lawyer that is broader than the liability imposed by statute or common law
    • Amend Rule 1.16 to make clear that a lawyer may retain copies of client files, including the lawyer’s work product, but may not use that work product in other matters if the Rules’ confidentiality provisions prohibit such use
    • Amend Rule 1.6 to make clear that a lawyer is not only permitted, but obligated, to use general (i.e., not client-specific) knowledge gained in the course of a representation for the benefit of subsequent clients; an
    • Amend Rule 1.16 to provide that where a lawyer has agreed that her client may make unilateral changes in the terms of a representation, the lawyer may withdraw if the client makes a material change to which the lawyer is unwilling to assent.”
  • “The Committee’s “Draft Report on Proposed Changes to the D.C. Rules of Professional Conduct Relating to Client-Generated Engagement Letters and Outside Counsel Guidelines (November 2020)” can be found here.”
  • “Commenters also are invited to address the proposed amendments regarding conflicts of interest, and specifically whether there are other, less far-reaching approaches that would appropriately limit the current open-ended ability of lawyers and clients to set the limits of what constitutes a conflict of interest.”
  • Details on how to provide comments on the DC Bar website.
Risk Update

Representation, Reputation & Risk — Developments and News of Note

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Today, I’ve consolidate several relevant and interesting news items and third-party commentary on unfolding election matters into an unusually a large but interesting update:

Another law firm bails out on Trump campaign” —

  • “Another law firm has moved to drop its representation of President Donald Trump’s campaign in its flurry of lawsuits challenging the results of last week’s presidential election.”
  • “Late Thursday night, Columbus-based firm Porter Wright Morris & Arthur notified a federal judge hearing a Trump-filed suit over the election tallies in Pennsylvania that the firm is seeking to pull out of the case.”
  • “Some Trump critics including Republicans affiliated with the Lincoln Project have indicated they planned to pressure the commercial clients of law firms representing the campaign to drop the firms if they continued with the court fight on behalf of the president.”
  • “‘Plaintiffs and Porter Wright have reached a mutual agreement that Plaintiffs will be best served if Porter Wright withdraws, and current co-counsel and such other counsel as Plaintiffs may choose to engage represent Plaintiffs in this case,’ the filing said.”
  • “‘Cancel Culture has finally reached the courtroom,’ said Trump campaign communications director Tim Murtaugh in a statement. ‘Leftist mobs descended upon some of the lawyers representing the President’s campaign and they buckled…The President’s team is undeterred and will move forward with rock-solid attorneys to ensure free and fair elections for all Americans.'”

Stephen L. Carter is a Bloomberg Opinion columnist. He is a professor of law at Yale University: “Trump’s Lawyers Are Just Doing Their Jobs” —

  • “President Donald Trump’s lawyers are under siege. The New York Times reports that mega-firm Jones Day is facing pressure from its own attorneys to withdraw from representing him in lawsuits claiming voter fraud. Piling on, the Lincoln Project plans to spend half a million dollars in a public relations campaign attacking the firm. Firms in Arizona and Pennsylvania have changed their minds about taking up the president’s cause. In four decades of teaching law, I’ve never seen anything quite like this.”
  • “So why am I frightened? Because we go down a dangerous path when we pressure lawyers to reject as clients those we revile. The representation of the unpopular has long been a core component of the integrity of the profession. The moments in our history when lawyers have lost that focus have not been happy ones.”
  • “Certainly, I do not argue that every lawyer need take on every client. Rule 6.2(1) of the Model Code of Professional Conduct is clear: ‘A lawyer ordinarily is not obliged to accept a client whose character or cause the lawyer regards as repugnant.’ True, the rule goes on to require each attorney to take on ‘a fair share of unpopular matters or indigent or unpopular clients,’ but there are plenty of ways to fulfill that mandate without representing Trump. And more important, the rule says nothing about lawyers rejecting clients whose character or cause others find repugnant.”

New York Times News: “Growing Discomfort at Law Firms Representing Trump in Election Lawsuits” —

  • “Some lawyers at Jones Day and Porter Wright, which have filed suits about the 2020 vote, said they were worried about undermining the electoral system.”
  • “Some senior lawyers at Jones Day, one of the country’s largest law firms, are worried that it is advancing arguments that lack evidence and may be helping Mr. Trump and his allies undermine the integrity of American elections, according to interviews with nine partners and associates, who spoke on the condition of anonymity to protect their jobs.”
  • “At another large firm, Porter Wright Morris & Arthur, based in Columbus, Ohio, lawyers have held internal meetings to voice similar concerns about their firm’s election-related work for Mr. Trump and the Republican Party, according to people at the firm. At least one lawyer quit in protest.”

Two other lawyers weigh in: “No Self-Respecting Lawyer Should Touch Trump’s Election-Fraud Claims” —

  • “The president may not have to worry about keeping a job after January 20, 2021, but the attorneys doing his bidding at the moment certainly do.”
  • “Some of the lawyers at the firms handling the litigation work for President Donald Trump’s campaign or related Republican Party organizations are now raising concerns internally about the legitimacy and purpose of the legal claims they are currently being asked to advance.”
  • “These concerns have merit: Lawyers have ongoing obligations to adhere to the ethical requirements of the state bars through which they are licensed, as well as the relevant rules of the court(s) before which they are practicing.”
  • “Rule 3.1 of the American Bar Association’s Model Rules of Professional Conduct—upon which most state bars rely at least in part—stipulates that a lawyer shall not bring an action unless a basis exists in law and fact for doing so. This rule implies that lawyers must do due diligence to inform themselves of the facts of the case and reasonably determine that a good-faith argument can be made in defense of the client’s legal claim.”
  • “Rule 11(b) of the Federal Rules of Civil Procedure—many of which are designed to serve as “gatekeepers” against frivolous lawsuits—requires lawyers to ensure that their arguments are not frivolous, and that factual contentions either have or are reasonably likely to have evidentiary support. Although the courts do not often exercise their discretion to enforce it, Rule 11(c) provides judges with the authority to impose sanctions against lawyers who have violated Rule 11(b).”
  • “These due-diligence obligations are of particular importance in the cases Trump and his team are now litigating. Rule 9(b) of the Federal Rules identifies certain “special matters” that must be pled with greater specificity and are thus subject to what courts call ‘heightened scrutiny.’ One of these matters is fraud: “In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake” (italics added). More than one court has held that the “heightened scrutiny” Rule 9(b) requires also applies to claims of election fraud.”

Washington Post Editorial: “Yes, going after Trump’s law firms is fair game” —

  • “As a general rule, we don’t want to discourage attorneys from representing unpopular clients. But facts matter, and there are some important distinctions to draw when deciding whether public criticism of attorneys is out of bounds.”
  • “The first distinction is criminal cases vs. civil litigation. An individual being criminally prosecuted has a constitutional right to legal representation. Defending the accused can be an ethical and professional obligation for a lawyer. A defense lawyer should not be shamed for representing an unpopular client confronting the awesome power of a government that could deprive him of his liberty or even his life. Conservatives have criticized attorneys defending terrorism suspects; liberals have criticized attorneys representing sexual predators such as Jeffrey Epstein. Both were wrong. But that principle does not come into play here. In the current situation, Trump is not being criminally investigated or prosecuted.”
  • “The Trump campaign and Republican groups in these cases are playing offense, not defense. They have filed lawsuits that appear to contain baseless allegations of fraud and that seek to have lawful votes rejected. For the attorneys, agreeing to bring such cases represents a choice, not a professional obligation. It’s fair for the public to hold accountable any lawyers who make that choice.”
  • “Clearly feeling the heat, Jones Day issued a statement saying it is not involved in suits alleging voter fraud or contesting the results of the election. The firm represents Pennsylvania Republicans in a Supreme Court case involving a court-ordered extension of the deadline for mail-in ballots. This claim has more legal basis than some of the other election-related litigation. Yet it is still a lawsuit seeking to reject thousands of votes cast in reliance on a ruling that sought to make voting easier during the pandemic. And although we now know there were not enough such votes to change the result in Pennsylvania, at the time the suit was filed it had the potential to affect the outcome of the election by disenfranchising thousands of voters.”
  • “A court may impose sanctions against a lawyer and firm for bringing a frivolous suit. But there’s no guarantee that will happen, and no reason that needs to be the only possible consequence for baseless or harmful lawsuits. Firm clients may choose to take their legal business elsewhere. Law students and lawyers looking for jobs may bypass the firms or may press them about this work when interviewing. Other lawyers already at the firms may choose to leave, as one Porter Wright attorney reportedly has already done. And members of the public may voice their disapproval, as many are doing now.”
Risk Update

Nano Tech, Larger Conflicts Allegations — Malpractice Suit, Advanced Waiver, Engagement Terms & More

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Malpractice Suit Against K&L Gates Heads Back to Texas Trial Court” —

  • “A conflict-of-interest suit against K&L Gates is likely headed back to a Texas trial court after the state Supreme Court on Friday declined to take an interlocutory appeal.”
  • “Quantum Materials Corp. of San Marcus sued K&L Gates in 2018 in Hays County district court, alleging the firm engaged in a conflict of interest by representing the business and its lenders in a dispute over a loan. That dispute led to Quantum Materials being sued in three states.”
  • “Quantum Materials, which makes tetrapod quantum dots for use in lighting applications, said in its petition that it engaged K&L Gates as counsel in 2016 to do corporate work, including drafting documents for a prospective lender. The company later shifted that legal work in-house, but maintains in the petition that K&L Gates never formally resigned from the representation and still remains as legal counsel to Quantum.”

Previously (March): “K&L Gates Loses Appeal In $100M Nanotech Malpractice Suit” —

  • “A ‘rational mind’ could look at a set of uncontested facts in a suit filed by nanotechnology company Quantum Materials Corp. and infer that K&L Gates LLP used the company’s information against it when it sued Quantum, a onetime firm client, on behalf of lenders, a Texas appeals court said Friday.”
  • “Backing Quantum in the firm’s bid to fight a denied dismissal, a three-judge Court of Appeals panel said the company made a prima facie case that K&L Gates violated its fiduciary duty to Quantum and engaged in a conflict of interest.”
  • “The panel also sided with Quantum on whether K&L Gates’ alleged misconduct was ‘unconscionable’ under the state Deceptive Trade Practices Act, allowing that claim to continue as well.”
  • “According to the suit, Quantum hired K&L Gates in 2016 for ‘non-adverse’ corporate advice, which included helping the company go public and the drafting lending agreements with two investor entities. The engagement letter included an advance conflict waiver allowing K&L Gates to represent adverse parties in matters not substantially related to the corporate work, which included attendance by a K&L Gates attorney at Quantum board meetings.”
  • “Quantum ultimately sued a transfer agent involved in the dispute. During that case, K&L Gates lawyers filed an intervention petition on behalf of the lenders alleging Quantum Materials had breached its contracts with the lenders. That spurred a Quantum Materials bid to disqualify the firm and accusations that the firm had used Quantum’s confidential information to benefit the lenders and itself. K&L Gates maintained that the advance waiver applied and that the matters were not substantially related.”
Risk Update

Conflicts — Romantic Conflicts, Relationship Conflicts

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Attorneys’ workplace romance could impact 300 Marysville court cases” —

  • “A Marysville prosecutor and a public defender could have compromised more than 300 cases by having a secret workplace relationship.”
  • “Sources confirm former city prosecutor Al Treacy and former public defender Marne Whitney were often on opposite sides of the same case, creating an obvious conflict of interest that was never divulged to co-workers or clients.”
  • “An internal investigation by city administrators recommended Treacy be fired. But in June, he resigned before that could happen. He was with the prosecutor’s office for 12 years.”
  • “A spokesperson for the firm told KING 5, ‘As soon as we learned of the inappropriate relationship between our employee and the Marysville City Prosecutor, we immediately terminated her employment and also reported her actions to the Washington State Bar Association.'”
  • “The pair worked on more than 300 misdemeanor cases together in Marysville. Those cases have all been reviewed to determine if any of them should be overturned.”
  • “Ken Kagan, an attorney representing Whitney, said there is no evidence that her clients were harmed in any way. In fact, Kagan said, ‘As a result of Ms. Whitney’s efforts in negotiating outcomes for her clients with Mr. Treacy, her clients actually did much better than they might have if they were represented by other lawyers.'”

A Fresh Look at Personal Interest Conflicts Involving Lawyers’ Relationships With Other Lawyers” —

  • “A recent ethics opinion from the ABA Standing Committee on Ethics and Professional Responsibility, Formal Opinion 494 (Opinion 494) examines the meaning and scope of personal interest conflicts specifically in connection with lawyers’ relationships with opposing counsel, a hitherto often overlooked component of Rule of Professional Conduct (RPC) 1.7. In this article we will discuss the principal conclusions in the opinion, and the lessons it holds for New York lawyers.”
  • “When lawyers representing different clients in the same matter or in substantially related matters are closely related, there may be a significant risk that client confidences will be revealed and that the lawyer’s family relationship will interfere with both loyalty and professional judgment.”
  • “As a result, each client is entitled to know of the existence and implications of the relationship between the lawyers, before the lawyer agrees to undertake the representation. Thus, a lawyer who has a significant intimate or close family relationship with another lawyer ordinarily may not represent a client in a matter where that other lawyer is representing another party, unless each client gives informed consent, as defined in Rule 1.0(j).”
  • “The opinion next deals with imputation. Here the ABA Model Rule materially differs from the current New York Rule, in that the Model Rule provides that personal interest conflicts are not imputed. There is no such exception in place in New York. However, a proposal to change the New York Rule to remove imputation of personal interest conflicts has been proposed by the House of Delegates of the New York State Bar Association on the recommendation of the Committee on Standards of Attorney Conduct, and is now before the Administrative Board…”
  • “While Opinion 494 is helpful in raising awareness of what constitutes a personal interest conflict in the context of relationships with other lawyers, it does not set out a clear process that lawyers may use to detect and resolve this (or any) kind of personal interest conflicts.”